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RERA's unexplained 'investigation' list puts Rs 50,000 cr real estate in jeopardy

Special Correspondent
Daijiworld Media Network - Business

Mangaluru, Jan 12: In a strange move last month, the new watchdog of the real estate industry in Karnataka - the Real Estate Regulatory Authority (RERA), published a list of projects in its web portal under the heading 'Projects under Investigation'. Included was a note in red, cautioning people that they would have to deal with these projects at their own risk.

This unexplained move by RERA sent the whole real estate industry in the state into a tizzy. The list began to be circulated in the social media, creating panic among customers who had already invested in many of the projects listed.

What was really puzzling about this move was that RERA had not bothered to check with the builders concerned before publishing the list, which mainly contained old projects, dating back to 15-20 years. The regulatory body has powers only to register ongoing and new projects and has no jurisdiction over old, completed projects.

Though RERA was clearly in the wrong to publish such a list and create unnecessary panic, several builders of repute, who had for many years maintained impeccable records, sent the occupancy/completion certificates of their projects listed by RERA to the body, as proof that their projects had perfect titles and were completely approved by government authorities. Their plea was that this erroneous list be corrected immediately since it was sending a wrong impression to their customers that the builder had done something wrong.

However, their pleas fell on deaf ears as RERA continued to show their projects in the 'Investigation' list.

Several questions arise about this move by RERA:

• What was the need to publish lists of old projects, over which it had no jurisdiction, and create an impression that these buildings were somehow 'illegal'?

• Why did RERA fail to check with the builders concerned about the projects before publishing the list?

• Why is it taking RERA an inordinately long time to check the occupancy/completion certificates sent by builders and correct the list?

Many of the builders whom Daijiworld spoke to say that this extreme move by RERA is causing irreversible damage to the reputation of the industry and will harm the development of the real estate sector itself. By some estimates, the value of the projects across the state that has been put under a 'cloud' by RERA is nearly Rs 50,000 crore. Many of these are already fully sold and several are backed up by housing loans from public sector banks. At a time when the real estate industry is going through a tough phase because of new legislation like GST, this unilateral action by RERA is sure to result in further hardship to builders and customers alike.

Says a prominent builder in the city, "What has been forgotten by the new watchdog is that RERA is under the statutory obligation to act not only as a regulatory machinery but also a development body to facilitate the growth of the housing sector. At a time when the focus should be on how to help the common citizen acquire a much needed shelter, RERA is creating unnecessary fear in the minds of people who wish to invest in a home."

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Comment on this article

  • Jossey Saldanha, Mangalore

    Sat, Jan 13 2018

    RERA's implementation is Pathetic

    DisAgree [2] Agree [3] Reply Report Abuse

  • dk shetty, mangalore/Oman

    Sat, Jan 13 2018

    Consumers must be communicated on various aspects of real estate projects. As they are the buyers. Their interest must be protected.
    Customer rights must be protected and transparency on projects must be laid out, in this case RERA is right.

    At the same time RERA i must provide that balance which helps builders and buyers.
    This development proves that India is on par with developed world where legal framework and transparency and compliance on projects must be made regularly.
    This protects consumer interests and upholds their rights.

    There are good builders and also there are fly by night operators and consumers have no idea who they are dealing with. RERA is a welcome development and this must be supported.
    I have friends who are major builders in Mangalore/Udupi & Bangalore region they also support RERA, However they want RERA to be balanced and compliant to legal framework and act as a watch dog protecting interests of buyers and promoting good ethical builders who deliver substance/quality to markets

    DisAgree [1] Agree [4] Reply Report Abuse

  • J o colaco, Mangalore

    Fri, Jan 12 2018

    Nobody suffering only builder and real agents suffer

    DisAgree [5] Agree [26] Reply Report Abuse

  • Padmanabha Shetty, Mangalore

    Fri, Jan 12 2018

    It seems RERA has been established without proper ground work and set up. Now in a hurry burry they are implementing rules and committing mistakes like this. When RERA is applicable for under construction and new projects, why they have notified completed and old projects even 15 to 20 years old. Being a responsible Government Body they should have first checked with proper Government Authorites and also called for documents from the builders before they list out projects from the website of the builders and notifying that 'Public is warned that dealing with these projects is at their own risk ". Now, those who have already purchased are also afraid as to whether they will have problem from Government for their flats. Public is worried that because of RERA common man cannot purchase flats. Who is going to solve this. Government should not create such 'unwanted fear in the minds of existing flat owners as well as proposed flat buyers. Public should oppose such wrong propaganda from Government.

    DisAgree [17] Agree [15] Reply Report Abuse

  • rudolf valerian dsouza, Falnir, Mangalore

    Fri, Jan 12 2018

    RERA created a fobia among the middle class people. They have published the completed project with such a TAG that people who purchased those premises are on hypertension, living in those premises are insecure, and planning to buy are confused.
    RERA is a government body. They should not forget that before them there are more powerful and essential bodies of the same government are existing and they are MUDA, CITY CORPORATION who are authorised bodies to realize the property and issue permission to construct the buildings and after the building is completed they are to issue COMPLETION CERTIFICATES to ensure the buyer that they are officially and legally safe.
    RERA should have approached them first and clarify whether these projects under these builders are officially completed or not.
    secondly, there are several categories in the real estate market. some projects may be on Joint venture, some are based on land deal only and some are on marketing terms only and so on .
    without realizing any such authenticity; then have opened the web pages and declared the projects are not safe. why?
    under what base RERA says that DEALING WITH THESE PROJECTS ARE AT THEIR OWN RISK? Can RERA tell that what risk is involved? for what reason these project are unsafe?
    if the projects are registered in RERA are safe? will they give 100% written guaranty that the builder will not cheat, delay or abscond? and this case will RERA recover the losses of the poor or middle class person? will RERA pay the remaining EMIs of the bank? Will RERA pardon the bank interest in such cases?
    These departments should have proper training and and syllabus to learn about the system and then they should be allowed to work in these fields.

    DisAgree [5] Agree [21] Reply Report Abuse

  • Bob, Udupi

    Fri, Jan 12 2018

    RERA is a total confused body. Everyone's Suffering.

    DisAgree [16] Agree [14] Reply Report Abuse

  • Mangalore Mirror, Mangalore

    Fri, Jan 12 2018

    RERA was supposed to make a million things clear and simple both for buyers and sellers, it has only created more panic and confusion. Better scrap this off soon.

    DisAgree [20] Agree [29] Reply Report Abuse

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